Startup Leaders Upbeat, Poised for Growth After Turbulent Stretch

Startup leaders weigh in on an economic environment filled with mixed signals and what’s ahead for them in 2024, according to the latest U.S. Business Leaders Outlook report from JP Morgan Chase. Scott A. Scanlon, CEO of Hunt Scanlon Ventures, takes a closer look.

March 7, 2024 – According to a just-released Business Leaders Outlook report from JP Morgan Chase, innovation economy leaders are still grappling with the fallout from three years of economic turbulence. But three in four leaders at early-stage startups, venture-backed and high growth companies are confident about their company’s performance heading into 2024. U.S. startup leaders, according to the report, differ in their views on the outlook for the national economy this year. Roughly four in 10 startup executives surveyed said they are optimistic about the national economy, while 30 percent said they’re pessimistic and 27 percent hold a neutral view.

Perspectives were more upbeat as the survey polled leaders’ outlooks closer to home. Half of startup respondents, according to JP Morgan Chase, are optimistic about their local and regional economies, and the majority (74 percent) are optimistic about their company’s performance.

Started in 2011, the annual and mid-year Business Leaders Outlook report provides snapshots of the challenges and opportunities facing executives of midsize U.S. companies. This year, 155 respondents completed the survey.

Top Challenges

Innovation economy leaders’ top challenges stand out from middle market executives, said the report. Roughly half of respondents (52 percent) cited the availability of capital or credit as a top concern, compared to just 13 percent of U.S. midsize businesses. And 48 percent cited revenue and sales growth as a key concern, compared to 39 percent of the broader middle market.

“Midsize business leaders have had to overcome a number of hurdles in today’s environment of continued inflation and rising costs of doing business,” said John Simmons, head of middle market banking & specialized industries at JPMorgan Chase. “Despite the hand that’s been dealt, they’re relentless when it comes to finding ways to adapt, while identifying opportunities for business growth. It’s inspiring to continue to see their upward trajectory.”   

Interestingly, a commanding 98 percent of startups said they expect revenue and sales to hold steady or increase in 2024, and 95 percent expect steady or increasing profits.

Related: Reasons for Cautious Optimism in 2024

“Small business owners tend to express greater optimism about the things they have the most control over,” said Ben Walter, CEO of Chase for Business. “They believe in themselves and trust their own ability to make strategic decisions even while dealing with factors they can’t influence. They remain a resourceful, adaptable driver of economic growth.”

9 Trends That Will Shape Work in 2024 and Beyond
In 2023, business leaders and organizations continued to contend with major shifts affecting the workplace, including the pressure of inflation, the emergence of generative AI, geopolitical turmoil, a series of high-profile labor strikes, increased tension over return-to-office mandates, a shifting societal landscape for DEI initiatives, and more… As we look toward 2024, we can expect disruption to continue. Leaders who proactively develop explicit business and talent strategies to navigate these trends will give their organizations a competitive advantage in both talent outcomes and achieving the organizations’ strategic goals, according to a recent report from Gartner.

“We have seen several shifts affecting the workplace, including the emergence of generative AI (GenAI), pilots around establishing a four-day workweek, and changes to traditional careers,” said Emily Rose McRae, senior director analyst in the Gartner HR practice. “This year’s predictions highlight the aspects of work that HR leaders must prioritize over the next 12 months.”

Given the difficult recent past, business leaders’ responses suggest they are prepared for whatever the market may bring in 2024. While 67 percent say declining tech valuations have had a negative impact on their ability to raise capital, 54 percent are confident they have enough capital to hold off raising additional funds this year.

Light Impact on Hiring 

“What I found most interesting from this latest research is that even though tech valuations have softened, most startup leaders indicated the trend is not a factor driving hiring, growth, innovation or liquidity,” said Scott A. Scanlon, CEO of Hunt Scanlon Ventures based in Greenwich, Conn. According to JP Morgan, he noted, though access to capital is clearly impacted by valuation, it seems leaders have prepared for that inevitability.

Related: Strategic Talent Acquisition Planning in 2024

A full 58 percent of respondents said they see no impact from declining tech valuations on hiring and talent management; in fact, 23 percent saw a positive impact while just 19 percent said they expected to see a negative impact.

“Startup leaders are taking a measured view on the year ahead as they navigate historical shifts in capital markets and rising interest rates,” concluded the JP Mogan Chase report. Indeed, half of startups said that they have raised enough capital for the year, and only three percent plan to raise debt.

“Despite the volatility of 2023, it has been encouraging to see the resilience of US businesses and the firm pace of US consumer spending growth that has contributed to the year’s stronger economic picture,” said Ginger Chambless, head of research, JPMorgan Chase commercial banking. “Over the last few years, business leaders have not only become adept at managing through tough times and recovering from speedbumps, but confident in their ability to manage and lead through crises given how practiced they’ve become. These learnings will set them up well to weather future uncertainty.”

“Today’s business leaders are not strangers to the challenges before them, and have remained nimble and primed for opportunities despite continued uncertainty,” said Mr. Simmons. “The most resilient leaders focus on continuous improvement, iterating with each challenge to make strategic investments in their operations, adopt new technologies and focus on their people to move their business forward.”

Related: Top 5 Executive Search Trends for 2024

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Executive Editor; Lily Fauver, Senior Editor – Hunt Scanlon Media

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